Stock Market Analysis

Manish, first thing that should be considered here is that no analyst is a jyotish. They give their advice based on what they feel from their knowledge and experience.

Their is no hard and fast rule to make merry of stock market all the time. Although the basics of investment has not changed. The golden rule still prevails i.e. a) Buy if you can hold (even for day traders),  b) Be dynamic and always be on your feet when the market is open, c) before investment fix a profit/loss booking level for your stock (i.e. 40% high i will exit, 10% low i will exit).

Piyush

probably you might not have asked this question if were aware from where the technical analysis orginated.

Both a stock trader or long term investor wants to earn profits by change in prices.  The the criterio which distingues them is - stock trader try to gains due to change in prices due to demand supply changes for the stock while long term investor is a value investor who cares about the earnings attached to the stock i.e. EPS. A long term investor buys the stock for which he believes EPS is going to increase while a trader buys the stock if he feels the demand for the stock in question is going to increase.

Now coming back to technical analysis, it a simple discipiline which helps you predicts the changes in demand and supply changes for a stock in short term based on past behavious plus certain principles.  Remember the technical analysis is not very much concerned about the fundamentals of the company, though macro factors sometimes affect the decisions.

If you see the logic of technical analysis, its pretty obvious. for example say suppose in history it has been observed that whenever nifty touches 2500 level poeple feels the prices are attractive and start buying the shares and hence demand increases. This forms the support of 2500 level. Likewise every principle in technical analysis is based on pure logic. Hence whether technical analysis works or not, I would say it has the same uncertainty attached as any other business in this world, provided you do it properly. But due to its simpliicty people start doing thier own technical analysis wihout understanding its underlying logic. 

Hope I have thrown some light on it.Things get easier to understand it you look at the big picture and try to understand the logic behind it.